GENERAL KNOWLEDGE

Detailed explanation-1: -It is the final payment made after deductions for EPF, ESIC, Professional Tax, Income Tax or Tax Deducted at Source and others. It is an amount paid to a person by an employer before making any deductions. Net pay is lower than gross pay. Gross pay is the sum of all benefits and allowances before any deduction.

Detailed explanation-2: -Gross pay is how much employees earn before taxes and other withholdings, whereas net pay is the amount of money employees actually take home after all payroll deductions. For example, if an employee makes $8, 000 gross per month and has $1, 700 deducted for taxes and benefits, that individual’s net pay would be $6, 300.

Detailed explanation-3: -Gross pay is what employees earn before taxes, benefits and other payroll deductions are withheld from their wages. The amount remaining after all withholdings are accounted for is net pay or take-home pay.

Detailed explanation-4: -Salary income refers to the compensation received by an employee from a current or former employer for the execution of services in connection with employment. Thus, income is taxable as salary under Section 15 only if an employer-employee relationship exists between the payer and payee.

Detailed explanation-5: -However, Gross Salary is what a company pays to an employee before deductions and Net Salary is what an employee receives after deductions.